Why are the reforms needed?

More than half the Australian population — about 13.5 million people — have private health insurance, but many people don’t fully understand what they are getting for their money and what they are covered for.

Australians have told us they find private health insurance complex and hard to understand what different policies cover and what they do not.

We want to make private health insurance simpler and easier for you to choose the cover that best suits you and your family.

When will the reforms begin?

Some reforms have already started, like the new Ombudsman's powers and improved access to mental health treatment. More reforms will start to roll out from 1 April 2019.

Many insurers will use the new Gold, Silver, Bronze and Basic tiers of hospital cover by mid-2019. Insurers have until 1 April 2020 to introduce the new tiers for all hospital policies.

How will the different levels of hospital cover work?

What is, and is not, covered in these tiers will be based on new minimum standard clinical categories. Clinical categories are types of hospital treatments described in a standard way.

The higher the tier, the more categories it covers.

If your health insurer covers a category — for example, ‘bone, joint and muscle’ or ‘heart and vascular system’ — they must cover all of the treatments in that category.

This makes policies easier to compare.

Health insurers will still be able to offer more than the minimum requirements. Policies which cover more than the minimum categories will use either the word 'plus' or a '+' sign in the policy name.

Who is affected?

The reforms may affect you if you have private health insurance. Some groups may be particularly interested in the reforms.

Women

Women will benefit from guaranteed cover in Bronze tiers and above for:

gynaecological services

ovarian and breast cancer treatment

breast reconstruction

Pregnancy and assisted reproductive services — such as IVF — are only minimum requirements for the Gold tier.

Young people

If you are between 18 and 29, your health insurer may offer you a discount on your hospital premium. The discount will gradually reduce after you turn 41.

The allowed discounts vary and generally depend on how old you are when you purchase a policy that offers discounts, or your age when your insurer introduces the discounts to your existing policy. Your insurer can choose to offer discounts as follows:

People travelling long distances for hospital treatment

Insurers will be able to offer travel and accommodation benefits as part of hospital cover to people who need to travel long distances to access specialised hospital treatment. This will be particularly beneficial for people living in rural and regional areas.

People accessing mental health treatment in hospital

Since 1 April 2018, patients with limited cover for mental health treatment have been able to upgrade their hospital cover to access higher benefits for these services without serving a waiting period. Policy holders are able to use this exemption from the usual waiting period on a one off basis.

Natural therapies

From 1 April 2019 health insurers will no longer be able to offer benefits for some natural therapies. The decision to remove those natural therapies from private health insurance cover was made following a 2015 review chaired by the then Chief Medical Officer.